Question

During the current year, the following manufacturing activity took place for a company's products. The beginning work in process, 70% complete, was comprised of 10,000 units. Units started into production during the year totaled 150,000 units. A total of 140,000 units were completed during the year. The ending work in process, 25% complete, was comprised of 20,000 units. What was the number of equivalent units using the FIFO method

Answer 1

Equivalent units= 145,000 units

Step-by-step explanation:

Giving the following information:

The beginning work in process, 70% complete, was comprised of 10,000 units. Units started into production during the year totaled 150,000 units. A total of 140,000 units were completed during the year. The ending work in process, 25% complete, was comprised of 20,000 units.

We need to use the following structure:

Beginning work in process = beginning inventory* %incompleted

Units started and completed = units completed - beginning WIP

Ending work in process completed= Ending WIP* %completed

=Number of equivalent units

Beginning work in process = 10,000*0.3= 3,000

Units started and completed = 140,000 - 3,000= 137,000

Ending work in process completed= 20,000*0.25= 5,000

=145,000 units